Daijiworld Media Network - New Delhi
New Delhi, Sep 13: India’s retail inflation, measured by the Consumer Price Index (CPI), rose marginally to 2.07% in August, up from 1.61% in July, according to data released by the Ministry of Statistics on Friday. Despite the uptick in the headline rate, food prices continued to decline, providing some relief to households.
July's CPI reading marked the lowest year-on-year inflation since June 2017, and August’s figures still remain comfortably below the Reserve Bank of India’s (RBI) 4% target. This offers the central bank continued space to maintain its accommodative monetary stance aimed at supporting economic growth.
Food inflation remained in negative territory for the third straight month, recorded at -0.69% in August. The decline was driven by a steep fall in vegetable prices, down 15.92%, and pulses, which saw a drop of 14.53%. Spices also became cheaper, with prices falling by 3.24%.
However, certain categories did witness price increases, contributing to the rise in overall inflation. Items such as meat and fish, edible oils and fats, eggs, and personal care products saw higher inflation in August compared to July.
Fuel inflation slightly eased to 2.43% in August from 2.67% in the previous month. Housing inflation also declined to 3.09% from 3.17%, while healthcare inflation softened to 4.40% from 4.57%.
Looking ahead, the Reserve Bank of India has projected CPI inflation at 3.1% for the 2025–26 fiscal year, citing positive monsoon conditions, strong kharif sowing, and ample foodgrain stocks as stabilizing factors for prices.
RBI Governor Sanjay Malhotra noted that the inflation outlook has turned “more benign” than anticipated earlier in June. He pointed to base effects, steady southwest monsoon progress, and comfortable buffer stocks as contributing factors.
However, he cautioned that inflation is expected to rise above 4% by the fourth quarter of 2025–26 and may stay elevated due to demand-side pressures and policy measures. Core inflation is also projected to hover slightly above 4% for much of the year, barring any major external shocks.